PACCAR INC Q4 FY2024 earnings call

• PACCAR achieved annual revenues of $33.7 billion, net income of $4.2 billion, and an after-tax return on revenues of 12.4% in 2024, the second highest profit in company history. • Fourth quarter revenues were $7.9 billion, net income $872 million. • PACCAR Parts set new records in 2024 with revenues up 4% to $6.7 billion and pre-tax profit $1.71 billion. • In 2025, US economy projected to expand >2%, US and Canadian Class 8 truck market forecast 250,000 - 280,000 units, European above 16-tonne truck registrations 270,000 - 300,000. • PACCAR Parts expects part sales to grow 2% - 4% in 2025. • Amplify Cell Technologies joint venture, PACCAR Parts expanding distribution centers, PACCAR Financial Services performing well.

In 2024, PACCAR achieved annual revenues of $33.7 billion. The fourth quarter revenues were $7.9 billion. PACCAR Parts had excellent fourth quarter revenues of $1.6 billion and pre-tax profits of $428 million. For the year, PACCAR Parts saw annual revenues increase by 4% to a record $6.7 billion, with pre-tax profit reaching a record $1.71 billion and parts gross margins averaging 30.9%. In the truck segment, last year's US and Canadian Class 8 truck retail sales were 268,000 units, with Kenworth and Peterbilt's share at 30.7%. The medium-duty market saw Kenworth and Peterbilt's market share grow from 14.5% to 18% with 21,500 medium-duty trucks produced.

• US economy projected to expand by more than 2% in 2025. • US and Canadian Class 8 truck market forecast 250,000 to 280,000 vehicles. • European above 16-tonne truck market expected 270,000 to 300,000 registrations. • PACCAR Parts estimates part sales to grow 2% to 4% in 2025. • First quarter 2025 Truck and Parts gross margins expected in range of 15.5% to 16%.

• Foreign exchange rate impacts, as seen in fourth quarter with negative effect on net income from foreign currencies. • Geopolitical issues in Eastern Europe affecting European market performance. • Regulatory changes that could impact product compliance and pricing.

Q: Tami Zakaria asked about delivery guidance by geography in first quarter vs fourth quarter.

A: Preston Feight said US Class 8 expected flat or up slightly in Q1, medium-duty market normalizing, Euro 6 implementation in Mexico affected Q1, fewer production days in South America, and good supplier performance in Q4 led to inventory reduction.

Q: Steven Volkman asked about revenue per truck decline and price increases for 2027 regulations.

A: Harrie Schippers said mix and foreign exchange rates affected revenue per truck, with half the reduction in average sales price due to foreign exchange. Preston Feight said general conversations with customers about $10,000 - $15,000 price increases for 2027 regulations.

Q: Jamie Cook asked about margins and sales growth.

A: Preston Feight said truck Q4 price vs cost was negative 0.6% on price and 2.7% on cost, expecting trending improvement, and parts margins strong at 30.9% in Q4, expecting good margins in Q1.

Q: Mats Liss asked about European market and capacity utilization.

A: Preston Feight mentioned European economy slight growth, Central and Eastern Europe impacted by geopolitics, Harrie Schippers said European market down 8% in 2024, capacity utilization good in Europe.